The British Pound broke down significantly on Tuesday, with a strong follow-through US Dollar upsurge dragging the GBP/USD pair to fresh YTD lows. The pair failed to gain any positive traction following the release of not so impressive UK employment details and dropped back below the key 1.3500 psychological mark, albeit managed to close just above the mentioned handle.
The greenback continued scaling higher and was further supported by the US economic data, which indicated that the economy is picking up pace after a slow start to the year. The 10-year Treasury bond yield shot above the psychologically important 3% level, hitting its highest level since 2011 on reviving hopes that the Fed might need to raise interest rates more aggressively, and was seen as one of the key factors driving the buck higher.
The downfall, however, lacked bearish conviction and the pair once again managed to find decent support near the 38.2% Fibonacci retracement level of the 1.1987-1.4377 up-move. In absence of any market moving economic releases from the UK, the USD price dynamics might continue to act as an exclusive driver of the pair's momentum through the European session. Later in the day, the US housing market data and a scheduled speech by Atlanta Fed President Raphael Bostic might provide some fresh impetus.
The negative signals provided by short-term technical indicators point to an extension of the pair's near-term bearish trajectory, which would be confirmed on acceptance below the immediate support near mid-1.3400s. A convincing breakthrough the mentioned support now seems to accelerate the fall towards the 1.3400 round figure mark before the pair eventually drops to test its next support near the 1.3330 area.
On the flip side, momentum back above the very important 200-day SMA, currently around mid-1.3500s, should continue to face stiff resistance near the 1.3600-1.3610 region, which if cleared might trigger a short-covering bounce towards a medium-term ascending trend-line support break-point near the 1.3640 area.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD trades with negative bias, holds above 1.0700 as traders await US PCE Price Index
EUR/USD edges lower during the Asian session on Friday and moves away from a two-week high, around the 1.0740 area touched the previous day. Spot prices trade around the 1.0725-1.0720 region and remain at the mercy of the US Dollar price dynamics ahead of the crucial US data.
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.